Reduced Rates of Stamp Duty Land Tax
09 Jul 2020
The Chancellor announced on 8th July 2020 that reduced rates of Stamp Duty Land Tax will apply on residential property purchases in England from 8th July 2020 to 31st March 2021.
What does this mean?
If you are purchasing a residential property and paying up to £500,000 then it is likely that you will not have to pay any Stamp Duty Land Tax on your purchase which could mean that you save up to £15,000.
If you are purchasing a property for more than £500,000 then you are likely to also benefit from not having to pay any Stamp Duty Land Tax on the first £500,000 of your purchase.
Who will benefit from this change?
Anyone who exchanges contracts and completes during the period from and including 8th July 2020 to and including 31st March 2021 should be able to benefit from this change.
Can I claim a refund if I exchanged and completed before 8th July 2020?
Unfortunately, it would appear that this change will not be applied retrospectively and so those people who exchanged and completed prior to 8th July 2020 will not be able to claim a refund.
Will I have to pay Stamp Duty Land Tax if I am purchasing a second property valued up to £500,000?
The reduced rates apply to the standard rates of Stamp Duty Land Tax only.
If you are purchasing a property which is a second home or which is a buy to let property then you are likely to have to still pay the additional property levy on your purchase. For example, if you are purchasing a second home valued at £500,000 which exchanges and completes before 31st March 2021 then you are likely to have to pay Stamp Duty Land tax of £15,000 based on the additional property levy of 3%. Before 8th July 2020 you would have had to pay £30,000 in Stamp Duty Land Tax. As you can see, second home buyers and buy to let property buyers are also likely to benefit from this change and make a saving of up to £15,000.
More information about these changes can be found on the HMRC website here
You can also use the HMRC SDLT calculator to calculate the amount of SDLT that is likely to be payable – click here to visit the HMRC SDLT calculator website
If you have any further questions about the Stamp Duty Land Tax changes then please do not hesitate to contact Stephen Bowden or Amanda Bartlett on 01202 484242.